A federal appeals court has upheld a ruling that ordered a Washington flower farm to pay about $2.5 million to a foreign supplier.
For five years, Holland America Bulb Farms of Woodland, Wash., bought flower bulbs from a company in the Netherlands, Midbrook Flowerbulbs, until they terminated the arrangement in 1999.
The owner of Holland America Bulb Farms, Benno Dobbe, suspected that shipping costs were being inflated by Midbrook Flowerbulbs, which was partly owned by his brother, Arie Dobbe.
After the two companies ended their relationship, Holland America didn’t pay for the final year’s delivery of flower bulbs due to Midbrook’s alleged overcharging.
Midbrook filed a lawsuit against its former client in the Netherlands and eventually won a judgment against Holland America in 2012 after extensive litigation and several appeals.
In 2014, that foreign judgment was recognized as valid by a federal judge in Washington, who ordered Holland America to pay about 2.2 million euros for the value of flower bulbs and multiple years of interest.
At today’s currency rates, that amount is worth more than $2.5 million.
Holland America challenged that ruling before the 9th U.S. Circuit Court of Appeals, arguing the foreign judicial proceedings were incompatible with U.S. due process requirements.
In the Netherlands, Midbrook was not required to turn over financial records that could have supported Holland America’s accusations of overcharging, the company claimed.
The 9th Circuit has now rejected that argument, ruling the court proceedings in the Netherlands met the requirement of “fundamental fairness” under a Washington statute governing recognition of foreign judgments.
The law considers foreign judgments to be valid even if the other country has different procedures and rules for evidence, the 9th Circuit said.
Otherwise, foreign judgments would be held invalid if foreign courts didn’t adhere to the “latest twist and turn” in the U.S. legal system’s understanding of due process, the ruling said.
“Such a high bar would encourage foreign powers to condition the enforcement of our judgments on the satisfaction of their procedural requirements, which could be just as onerous as our own,” according to the 9th Circuit.